The town of Brunswick has welcomed a decision by the state to withdraw legislation that may have exempted an aviation company from paying property tax at the town's former Navy air base - now known as Brunswick Landing. But the agency managing the base's civilian redevelopment is having a different reaction. The business at the center of the controversy is Kestrel Aeroworks, one of a number of civilian firms that have moved into what was once the Brunswick Naval Air Station.

On Monday, Maine's commissioner for Economic Development decided to pull LR 492 - a draft proposal to "Clarify the Property Exemption for Municipally Owned Airports." Some believe it was intended to help Kestrel qualify for a property tax exemption.

But state officials stress the decision to pull the bill was not prompted by the situation regarding Kestrel's operations in Brunswick, rather by the lack of legal clarity across the state when it comes to exempting aviation businesses from property taxes.

Attorney Andrew Cashman does not agree. He's with Preti Flaherty, the law firm hired to represent the town of Brunswick.

"The bill was never printed so we never saw the substance of the bill, so it was difficult to able to comment on exactly what it was they were pursuing," he says. "But from what we had heard, it sounded like something that was more custom-tailored to Kestrel rather than what they had been presenting it as."

He says the town of Brunswick will remain vigilant during the coming legislative session, in case any similar bills are proposed on the taxation issue - bills which may interfere with the relationship between the town of Brunswick and MRRA.

MRRA refers to the Midcoast Regional Redevelopment Authority - the agency overseeing the civilian development of the former naval air station. MRRA and the town have disagreed in the past on whether Kestral qualifies for a property tax exemption.

But Cashman says he welcomes a recent decision by MRRA not to seek legal action against the town over the issue of Kestrel's property tax. Instead, MRRA is asking for a property tax abatement on the issue - something that Cashman sees as a signal that the agency wants to pursue a more collaborative strategy than it has in the past..

"Brunswick wants to work with the MRRA board and wants to find a solution to move beyond this and some of the other disputes, and focus instead on substantive economic development at Brunswick Landing," Cashman says. "At the end of the day, that's what we all want to see."

"There are going to be disagreements from time to time - this is a significant venture," says Steve Levesque, the executive director of MRRA. He says the priority right now is to have an ongoing dialogue with the town of Brunswick on how best to re-develop the former base.

"The faster we can redevelop the base, the more revenue that goes to the town to help with their municipal ventures and school funding," Levesque says.

Levesque says he understands the state's decision this week to withdraw LR 492 - the property tax legislation regarding municipal airports. He agrees with the state - that the decision to withdraw the bill was prompted by a lack of legal clarity on the issue, rather than a desire by the state to back away from a dispute between the town of Brunswick and MRRA.

"It's not really about Brunswick, it's about how the law is applied on a statewide basis," he says. "You have a state law that is being applied inconsistently throughout the state. That's the biggest issue."

Kestrel's reaction to all of this will likely be keenly watched. Could the increased likelihood of having to pay property tax in Maine drive the company away? The aircraft designer currently employs around 40 people in Brunswick. Kestrel's original plans were to have about 10 times that number at the site. But 12 months ago the company announced it was moving the bulk of its manufacturing operations to Wisconsin, when state officials there offered a deal Kestral officials said was too sweet to turn down.